SEC Issues Alert On Outsourcing and Data Security

guest · Jun 13, 2019

SEC Issues Alert On Outsourcing and Data Security
June 11, 2019
https://www.eyeonprivacy.com/2019/06/sec-issues-alert-on-outsourcing-and-data-security/

The SEC recently issued a risk alert warning about using vendors and cloud-based platforms. Many broker dealers and investment advisors are turning to these third parties to store customer data. In its alert, the SEC’s Office of Compliance Inspections and Examinations warns firms that relying on those third parties’ security tools is not, in and of itself, sufficient for the companies to demonstrate compliance with Regulations S-P and S-ID.

Of concern for the SEC is firms who might have inadequately configured the security settings on their network storage systems–whether on site or cloud-based. Also of concern, and mentioned in the report, is failing to exercise enough oversight over the vendors’ security settings.

It also recommends that companies have vendor management policies that provide for regular implementation and monitoring of software patches and hardware updates.
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